Despite the decrease, CoreLogic noted that home equity remained solid, with the number of properties with negative equity – also known as underwater properties – unchanged from the previous quarter at 1.2 million homes, or 2.1% of all mortgage properties. Year over year, however, the number of homes in negative equity increased by 4% from 1.1 million homes, or 2% of all mortgaged properties.
Borrowers with equity positions near (+/- 5%), the negative equity cut-off, are most likely to move out of or into negative equity as prices change, according to ATTOM. In Q1, 145,000 homes would regain equity if home prices rose by 5%, but if home prices declined by 5%, 213,000 properties would fall underwater.
“While homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity,” Hepp said.
Want to keep up with the latest mortgage news? Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
Comments are closed, but trackbacks and pingbacks are open.